Industry Insights: Why Tech Companies Are Moving from the Suburbs to the City

Tech companies these days are increasingly city dwellers. Gone is the impulse, typical of the original Dot-Com boom, to find some sprawling acreage in suburbia and recreate their own Silicon Valley.  Microsoft built a home in Redmond, WA. AOL inhabited a campus in Dulles, VA. Now, many of those suburbanites are moving their headquarters or opening new offices in major cities nationwide.

Why are tech companies moving from the suburbs to the city? The answer has rippling implications for any business looking to hire in the tech sector.

Bright Candidates, Big Cities

One of the main factors driving business migration is a simple yet strong motivator: big cities are the home of today’s talent. Millennials, a generation that came of age in the suburbs, have made the switch and moved to bigger cities. The Pew Trust finds that one in five residents of big cities like Boston, Denver, Manhattan, and San Francisco are between the age of 25 and 34. Other cities like Austin, St. Louis, Nashville, and Portland also consist of large Millennial populations.

Because these cities and others like them are the magnetic poles attracting young IT professionals, many tech companies have decided to make the move too. Google has an office in Chicago and other metropolitan areas. Amazon already has headquarters in Seattle, but plans to build a trio of bio domes to distinguish the space. Startups and other businesses are following the same logic, but Millennials are not the only reason they stay.

Unique Strategies to Attract Tech Companies

Ben Franklin’s two certainties in life were death and taxes, but just about any business would jump at an opportunity to pay fewer taxes. That’s what many big cities have been offering to tech companies as a way of drawing their business from competing suburbs and cities.

New York City has a reputation for fervently spending millions to attract new tech companies and keep homegrown innovators from migrating elsewhere. Controversial bids have kept Buzzfeed and Etsy from moving and expanding elsewhere. Omaha, Atlanta, Indianapolis, and other big cities have initiated their own tax incentives to pull tech innovators into their local economy.

However, tax incentives alone aren’t required to attract tech companies. Chicago attracts tech businesses ranging from vibrant startups (GroupOn, GrubHub, Coyote Logistics) and established tech companies (Salesforce, Microsoft, Facebook) all without offering tax incentives. Eager investors, excellent regional universities, and a cooperative Chicago tech community have helped to make part of the difference.

Big City Moves Have Big Implications for Tech

What does this all mean for the tech industry? The impact is widespread and intricate. One clear result is that tech companies migrating to big cities will perpetuate the cycle. More job opportunities in big cities will attract more Millennials. More Millennials will boost the economies of big cities and give them more funds to attract tech companies.

Talent will be difficult to acquire for different reasons. Tech companies with offices in the suburbs will find that their talent pools have become smaller. Tech companies with big city offices will experience greater competition for local talent. In almost all cases, hiring processes will need to evolve for businesses looking to attract the best talent on the market.

One key to success in this job market is adapting and anticipating candidates’ needs. Fortunately, those needs are relatively straightforward. An Indeed survey finds that employed candidates value three major factors: competitive pay and compensation (76%), a good location (51%), and flexible hours (50%). Businesses that offer competitive salaries, benefits packages, and telecommuting options are ahead of the game.

Speed is also critical in such a competitive market. For that, many companies are turning to staffing agencies to speed up their hiring. With access to extensive talent pools, deep knowledge of competitive compensation, and dedicated teams of staffing professionals, the best recruiting agencies can quickly fill your open positions.

At Geneva Technical Services, we can provide your business with specialized IT expertise through our quick and cost-effective 9 step recruiting process. Contact us today to start a relationship that will last for countless hires to come.

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