The governor was quick to telephone Target and Best Buy executives after the Amazon.com second headquarters opportunity popped up, noting later that it would be aggravating for these local companies to see Minnesota “tax dollars and special incentives” handed to a fierce rival.
Aggravating, yes, but not crippling. Nothing like the feeling of losing their best employees to Amazon.
The reason these companies haven’t been more vocal about the potential of an Amazon headquarters here and its eventual 50,000 jobs — barely doing more than acknowledging a conversation with the governor — is that complaining about another worry: competing against Amazon for workers, would make them look like whiners. But it’s clearly an issue.
And that raises a legitimate question. Would turning the Twin Cities into a second Amazon company town be good for the region, when Amazon’s growth could come at the expense of a group of diversified and homegrown employers?
The corporate community in the Twin Cities appears split on this project, one of the biggest economic development opportunities in a generation. And this is a big reason why: It’s already hard enough to fill open jobs.
To the skeptics, the best case is that a costly war for talent would break out and expenses for headquarters staff would surge, shrinking even a very big company’s net income. The worst case is having to fight the war for talent and losing it in a rout.
Target CEO Brian Cornell got to the top of a very big company by besting rivals large and small, and so he may actually shrug off the idea of Amazon across town as just another way Target would have to compete every day with Amazon.
But Gov. Mark Dayton didn’t do him or Best Buy CEO Hubert Joly much of a favor by singling them out. Their challenge in recruiting people isn’t much different from any number of other big employers in the Twin Cities. The Optum unit of UnitedHealth Group isn’t even an Amazon competitor, for example, yet it could provide a rich vein of technical talent for Amazon.
General Mills would be a place for Amazon to look for marketers. Amazon is a logistics company, as much as it’s a retailer, and it could find smart people who know how to make systems for efficiently moving goods at C.H. Robinson Worldwide.
Then there are workers at smaller companies in technology, like software provider SPS Commerce in Minneapolis, who might find the prospect of working with a big Amazon budget enticing. But soon SPS could find itself in its own war with Amazon for talent.
Whole teams jumping to Amazon at once is highly unlikely, of course, in part because Minnesota is one of those states where it’s possible to get a reasonable noncompete agreement enforced. Yet even founders in the tech startup community who don’t want to work for any boss seem to look at Amazon as both a threat and an opportunity. Tech entrepreneurs complain that the Twin Cities already seems too much of a company town, with its collection of Fortune 500 company headquarters. Amazon here would only make it worse.
Speculation about Amazon is more than idle talk in corporate circles, too, as executives say they can see a pretty good case for Amazon to actually build here. And while Amazon could attract people from lots of employers, their case starts with the concept of business clusters.
Clusters form when a group of companies more or less in the same industry figure out it’s better being located across town from each other. Intuitively the idea seems suspect. With information technology as good as it is now, good work and good thinking should be able to be done all over. In practice, though, clustering makes sense. The know-how seems to seep from company to company, through the workers and suppliers, making them all more competitive as a group.
I’ve never seen research on what happens in a business cluster, though, when one of the competitors turns out to be a predator. What you hear about Amazon as an employer is that it tries to “own the market,” meaning it offers its best candidates a combination of top-of-the-market pay along with the promise of the most cool things to work on.
“We clearly have a retail cluster here that ranks with anybody else’s retail cluster in the country,” said Paul DeBettignies of Minnesota Headhunter LLC. “Why not set up shop in a town that knows how to do it? San Francisco is not all that great at it, and I don’t know of Seattle outside of Amazon is all that great at it. So yes, there is already a pool of people here that are likely candidates.”
DeBettignies has become a vocal booster for chasing the second Amazon headquarters. The governor’s tepid response clearly frustrated him.
“I don’t understand the logic,” he said. “We want to grow the economy, but we don’t want to let competition in?”
He agrees Amazon would be a tough competitor for talent, yet he rejects the idea that it would be a zero-sum game with local employers. As a recruiter he knows first hand how hard it is to get candidates from out of state, and the gravitational pull of Amazon would pull in many people looking for careers in data science, merchandising, software development and other fields.
He’s making a good point. Economies are very dynamic, and Amazon would help grow the size of the pie.
It’s impossible to know, of course, how many Minnesotans would actually want to work for Amazon. The company isn’t known for running a kind and gentle shop in Seattle, particularly after the New York Times two years ago detailed a “bruising workplace” of cutthroat competition.
Asked to speculate on which job offer gets accepted with Amazon going head to head with Target, DeBettignies paused to think.
“If you are really talking about a red apple to a red apple,” DeBettignies said, “and it’s Amazon Minneapolis and not Amazon Seattle … I think Amazon wins.”