Flight to the Cities: Recruiters Exploit Desirable Locations to Gain an Edge

In the fight for top talent, recruiters can wield many tools. They can try to entice prospective candidates with impressive salaries or generous benefits packages. They can also dangle the promise of on-the-job training, a great workplace culture or even a clear path to advancement to lure job seekers. Those are all undoubtedly effective, but there's another factor candidates value that companies across the country are appealing to: the location where people work.

It’s no longer just a mantra for real estate agents. During the latter half of the 20th century, companies followed the lead of employees’ exodus from cities. But today, many companies are forsaking sprawling suburban campuses for city life. Pinterest, Twitter and numerous other companies have moved their headquarters to San Francisco during the past two years, while established companies like Google are expanding into the Mission District and other hip neighborhoods with satellite offices. In Seattle, Amazon is planning to leave its suburban Bellevue home for a new headquarters downtown that will house more than 9,000 employees.

"The energy and excitement from employees being in an urban environment — I hear it daily," John Schoettler, Amazon’s director of global real estate and facilities, tells The New York Times about the company’s move downtown. "A lot of people don’t even have a car. They want that urban experience right there."

It’s a similar story in New York and Boston, and the motivation is largely an effort by companies to attract skilled, millennial-aged employees. In the battle for talent, companies must meet potential employees on their terms.

The appeal of a desirable location is the reason Jim Dougherty chose Cambridge, Massachusetts, as the location for his healthcare IT startup, Madaket.

"We wouldn’t even remotely consider moving to the suburbs," Dougherty tells The Boston Globe. "I lower my rent costs but I don't get top people. And if you can’t get top people, you might as well not start a company."

The move into cities isn’t just a phenomenon for tech companies on the coasts. Kum & Go, a Midwestern convenience store chain, is uprooting its headquarters (and its 250 employees) from the Des Moines suburbs to an art and sculpture park downtown. The city created the area, Western Gateway, in 2009, in part to lure business development downtown, according to The Des Moines Register. That's Western Gateway in the photo above.

The reasons for the move into cities around the U.S. differ by company and region. Among the benefits are tax breaks, office space availability, access to public transportation, the network effect of being located near other companies and universities, and close proximity to skilled talent who want to live and work in cities because of the entertainment and cultural opportunities.

The trend is an acknowledgement that location matters for recruitment — especially for the millennial workers who are leading the city repopulation trend. According to the U.S. Census Bureau’s latest figures, population growth in America’s largest cities is outpacing suburban population growth, a marked change from the previous decade.

Companies are increasingly comfortable with paying higher rents or even alienating current employees who don’t want to swap office parks for new digs downtown to attract top talent. And increasingly, that talent belongs to the millennial generation. By 2015, millennials will make up nearly half of the U.S. workforce, according to research from the Society for Human Resource Management.

As study after study suggests, those millennial workers are motivated by different factors — or are at least more vocal about those motivations — than previous generations. A trendy office downtown might not be the most important factor. Salary, training and career advancement opportunities are all undoubtedly important. The new workforce might not even want to work in an office at all, valuing the flexibility to work when and where they prefer, but a convenient city location is just one more tool in companies’ arsenals to win the high-stakes fight for talent.

CC-licensed image via Flickr/Jason Mrachina