Amazon HQ2: A Wake-Up Call

As Amazon considers proposals from short-listed cities to become the site of its second headquarters, CIOs at companies in these locations cannot afford to put off thinking about talent and evaluating their workforce strategies.

Let’s start with why cities are interested in Amazon HQ2. Amazon expects to invest more than $5 billion in construction and grow HQ2 to include 50,000 high-paying jobs. Construction and ongoing operation could create thousands of additional jobs and billions of dollars in investment.

Amazon is expected to make its decision within a matter of months. The Brookings Institution’s Joseph Parilla believes that access to qualified talent is the single-most important factor Amazon is considering. “Amazon will ultimately make this decision based on where they can get a quality technical workforce at scale,” he said.

Thus, it’s not surprising that all of the finalist cities share the following characteristics:

  • Metro area with a population of more than one million
  • High concentration of tech workers
  • Accelerated growth in STEM employment
  • Large presence of college and universities
  • Robust transportation infrastructure
  • Airport with plenty of connections to Seattle

Yet, with its 50,000 jobs and likely economic impact, HQ2, according to the Parilla, “has potential to reshape U.S. cities” and perhaps the talent strategies of CIOs at major corporations in whichever city “lands the whale.”

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Atlanta, for example, is experiencing a surge in high-tech job growth, due to its low cost of doing business, quality of life and local tech-focused research facilities.  However, with employment growing (the unemployment rate in Atlanta is 4.9%),  it appears the supply of skilled IT workers may have its limits. Georgia employers post a daily average of 5,010 openings for IT-related jobs, according to the Technology Association of Georgia. Companies especially are looking for software developers with expertise in programming languages like SQL, Java, Linux and Python.

Atlanta is not alone. There is a national shortage for these skills. The Bureau of Labor Statistics projects employment of software developers to grow 24% through 2026, faster than average for all occupations. Employment of applications developers is projected to grow 30%, and systems developers, 11%. The reason is an increase in demand for computer software.

“The sheer pace of change, immigration reform and a tight labor market require us to look at the market and talent differently,” said my colleague, Ami Sarnowski, Chief Innovation Officer at Genesis10, a professional technology services firm with a delivery center in Atlanta.

While the finalist cities should be taking a serious look at the possible arrival of how Amazon will impact their talent pools, this also is a moment of reflection for the cities that were not selected. Indeed, some of these cities are investing, creating new programs to build a digital-ready workforce or developing strategies so that their regions will be more competitive in future bids.  For example, Cincinnati and Sacramento are looking to invest in workforce development programs that focus on tech talent while Detroit is seeking funding to develop a regional transportation network that will connect outer counties to the cities.

The 238 cities not selected find themselves in a situation that the Brookings Institution’s Parilla describes as, “a kind of look-in-the-mirror moment.”

“If we’re going to compete for the next HQ2 project out there, we know we’re going to have to fundamentally rethink our economy, and that’s what this is all about,” said Rob Dixon, head of the Missouri Department of Economic Development.

Investments will be critical for cities to sustain growth and attract the next HQ2 project. At the same time, as companies in these cities compete to attract and retain talent, CIOs and their HR colleagues will need to embrace new tactics. These include reskilling workers, leveraging underutilized populations or tapping into overlooked talent pools, such as older workers separated from their executive careers, mothers returning to the workforce, non-computer-science STEM graduates and veterans.

By looking outside the existing supply of trained and certified workers and building capabilities through training, companies in whatever city Amazon selects, or in this case too did not select, will be prepared to shore up their workforce. This is a wakeup call for cities across the U.S.

Harley Lippman

Harley Lippman
Harley Lippman is founder and CEO of Genesis10, a professional IT services and staffing firm.

Harley Lippman

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