Expanding beyond its current home of Seattle, Washington, Amazon has recently announced a search for its second headquarters. The stakes are high, as the chosen city will likely enjoy the boom that comes with tens of thousands of jobs.
Countless outlets, including The New York Times, have already weighed in with their suggestions. But the process of selecting the perfect location is far more complicated than most people realize, and tech companies of every size and stripe should be paying attention.
Drilling Down the Decision
In the somewhat cheeky article "Dear Amazon, We Picked Your New Headquarters for You," The New York Times writers start with a list of about 50 desirable North American cities and then determine which ones really shine, given Amazon's selection criteria. Specifying that the new headquarters must be located in an area of strong job growth cuts the list in half right off the bat, eliminating otherwise decent options such as Detroit and Chicago.
An adequate pool of tech talent may be the most important consideration. LaunchCode, a nonprofit organization aiming to fill the gap in tech talent by matching companies with trained individuals, seeks to tackle situations just like this. "The best landing place for Amazon's massive new facility is a market that's committed to an aggressive and innovative plan for tech skilling and hiring," according to Jeff Mazur, executive director of LaunchCode. "While most of the competitive HQ2 cities are turning out hundreds of newly minted software developers each year, Amazon needs to be in a market that is growing developers thousands at a time."
Of the 25 cities exhibiting signs of job growth, which have the right kind of labor pool for Amazon? It's likely a decision that Amazon's leadership will be poring over, and other tech companies that may need to expand soon should learn from Amazon's example.
For those in the market for a move, here are some important factors to consider:
1. Access to talent
As tech leaders know, skilled developers who fit well with a team can be hard to find -- and even harder to retain. If you're considering establishing a headquarters, make sure you look at the talent pool in the area.
There's definitely a labor shortage in areas such as coding, and organizations like LaunchCode aim to address that. Jeff explains, "We started LaunchCode so companies like Amazon can access new pools of reliable and skilled tech talent in a diverse selection of markets across the country or at massive scale in any particular market." If you're struggling to find a suitable candidate, the group can match you with a hardworking coder to help with your company's workload.
2. Physical space for growth
The Times authors settled on Denver because it had the biggest advantage over other cities in terms of real estate prices. For a company like Amazon, this is critical; it could ultimately require up to 8 million square feet of space.
If you have a hard time believing that, consider that the company currently occupies about 19 percent of all office space in Seattle -- more than the next 40 biggest employers in the city combined. Obviously, your needs may differ, but whatever your requirements dictate, the real estate market should be a factor.
3. State incentive programs
You might not have the clout Amazon enjoys with a $5 billion spending plan, but states may still have government programs in place designed to encourage tech companies to put down roots. It's also worth discussing your options with local government officials, who could see your company's presence as a win for their constituents.
Amazon is a corporate giant, and as such, it has a lengthy list of needs for choosing a location for its headquarters. While 8 million square feet of office space probably isn't on your own company's list, you may be surprised by how many of Amazon's requirements mirror your own.
Your company may not have the biggest cities in North America in a bidding war of incentives, but that doesn't mean you should sell yourself short. In the end, doing your homework will allow you to find a location that provides a good fit -- both for your employees and for the city they'll be calling home.