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Amazon's HQ2: A Lesson in Skills Gaps

Posted by Brian Sorenson on January 29, 2019

Topics: Workforce Development, Talent Management, Employee Training, Skills Gap

Amazon announced its choices for the coveted HQ2 locations more than two months ago, and the decision continues to elicit commentary nationwide. Of course, given everything at stake—Amazon says it will invest $5 billion and create more than 50,000 new jobs across the two locations—it’s no surprise that the decision continues to be a topic of discussion.

Amazon CEO Jeff Bezos attributed his company’s decision to open its additional headquarters in Northern Virginia and New York City to the supply of “world-class talent” in both areas. Framed that way, it’s easy to see how leaders in other communities—not just those that were in the running for HQ2, but also those that have future aspirations to invite such economic development to their regions—could come away from Amazon’s decision second-guessing their own talent pipelines.

If economic heavyweights like Chicago, Atlanta and Dallas failed to win over Amazon, how are other communities to compete?

Amazons-HQ2-A-Lesson-in-Skills-Gaps_CAEL_2019

To answer that question, communities must first understand the vital importance of ensuring that would-be employers have access to not just talent, but skilled talent, in addition to providing sufficient resources for upskilling that talent. As Burning Glass notes in their data-driven analysis of Amazon’s HQ2 decision process, access to talent was a key tipping point for the retail giant.

These criteria matter not only when it comes to business attraction, but also for encouraging business retention and growth. As a Washington Post op-ed suggests, it isn’t enough to have a talent pipeline that’s sufficiently skilled to tackle the jobs of today; communities must also have coordinated high-quality education and training systems to help workers stay current in the rapidly evolving workplace. It is also vital that regions demonstrate a deep understanding of the skills that employees are expected to possess.

Finally, the HQ2 decision process has made it clear that regions must be able to provide persuasive data in order to remain competitive as they seek to encourage business investment. In order to be persuasive, the data that regions provide should pertain not only to workforce demand, but also to the existing workforce, education and training assets that are available to prospective employees.

As one of the largest retail companies in the world, Amazon may be in a class of its own as an employer. Nevertheless, companies of every size seek access to many of the same community attributes that inspired the online behemoth to choose the specific places it ultimately selected for its HQ2 decision. 

As CAEL’s President Marie A. Cini recently noted in an editorial published in The Hill, all skills gaps are, by their nature, local. A healthy workforce ecosystem is one where the full range of providers plays its part in meeting the range of employer and target sector needs. While there’s no one-size-fits-all approach to fostering a conducive workforce ecosystem for businesses that, like Amazon, are looking to expand their reach, there are some best practices that any region can follow to develop a new approach for attracting business investment.

How would you rate the health of your region’s workforce ecosystem? Click the button below to download CAEL’s Healthy Workforce Ecosystem guide. We hope it helps you take stock of where your region stands.

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